Rising farm values is being driven by a couple of things. Yes the inflation and demand-driven rising food prices. It's also being driven by the same forces that's driving real estate values around the country and the world - low interest rates, and great wealth inequity. The billionaires are forming clubs (funds) to buy up farms and forests around the world. This has been going on since the late 2000s but has accelerated over the last decade. Bill Gates is the largest owner of farm lands in the US now as an example - and that's just what's directly in his name, and doesn't cover his indirect ownership through investment funds that specialize in owning farms. In a word - folks, this is but a small bit of news on the bigger picture - we are heading back to the medieval age where the lords owned all the lands and houses and the rest of us are serfs living at their mercy. Welcome to the New Middle Ages.
The article addresses that:
Researchers have estimated that investors and large corporations only own about two per cent of Saskatchewan's farmland, but André Magnan, an associate professor of sociology at the University of Regina, said the increased competition has raised property values.
It looks like the buyers are mostly other existing farms:
People looking to sell their small- or mid-size farms are also likely going to take the highest bid, Gertler said. Larger operations have more capital and borrowing power, allowing them to outbid their competitors and, in the process, raise the value of the land and grow their operation even more.
The investor ownership list likely doesn't cover corporate farms. I forgot to add one more thing to that list - capital intensity has increased in farming. Farming is more efficient with large automated machinery. And with larger corporate farms. The larger the farm the more efficient it can be because of scale - whether purchasing machinery, maintaining them, sourcing inputs (labor, seeds, feeds, ferts etc) and selling outputs and the organization around the business. Consolidation is going to be driven by investors.
Rising farm values is being driven by a couple of things. Yes the inflation and demand-driven rising food prices. It's also being driven by the same forces that's driving real estate values around the country and the world - low interest rates, and great wealth inequity. The billionaires are forming clubs (funds) to buy up farms and forests around the world. This has been going on since the late 2000s but has accelerated over the last decade. Bill Gates is the largest owner of farm lands in the US now as an example - and that's just what's directly in his name, and doesn't cover his indirect ownership through investment funds that specialize in owning farms. In a word - folks, this is but a small bit of news on the bigger picture - we are heading back to the medieval age where the lords owned all the lands and houses and the rest of us are serfs living at their mercy. Welcome to the New Middle Ages.
The article addresses that:
It looks like the buyers are mostly other existing farms:
The investor ownership list likely doesn't cover corporate farms. I forgot to add one more thing to that list - capital intensity has increased in farming. Farming is more efficient with large automated machinery. And with larger corporate farms. The larger the farm the more efficient it can be because of scale - whether purchasing machinery, maintaining them, sourcing inputs (labor, seeds, feeds, ferts etc) and selling outputs and the organization around the business. Consolidation is going to be driven by investors.